tv Key Capitol Hill Hearings CSPAN June 3, 2014 9:00pm-11:01pm EDT
it is very important element. so we are supportive they have gone forward to do that with respect to certain trains. >> part of that agreement was community relations emergency response, but specifically to the speed reductions. in working voluntarily with agencies, i think that's a good way for industry to operate. i think it's a good way for the agencies to operate. my question to you, again, do you support that? do you support the agency's coming with industry with private industry and trying to reach these voluntary agreements instead of mandate from the top down always? >> i absolutely support industries coming forward. we think that compliance with regulations is not enough. in many instances when we're
talking about moving hazardous materials across the country, the backyards, the main streets of america, both the railroad and petroleum industries have been given a public trust, and complying with regulations is not enough. safety is our ultimate goal. absolutely, we think it is great when industries come together and agree on a cooperative, collaborative basis to take steps that have not yet put into regulations. >> do you feel that the railroads negotiated in good faith during the voluntary negotiations that took place? >> i have no reason to view anything otherwise. i guess i would ask administrate er -- do you support the
voluntary agreement with the railroads with regard to the speed reduction. we all want safety. that's the number one concern. we all want that. we want to make sure that the tank cars that are being refitted, possibly, and i know there's some railroads that are taking the lead on that in trying to move forward to make sure that we move certain materials in the most safe way we possibly can. do you think this voluntary agreement was a good step? >> i think it was very significant and certainly commend the industry for coming forward with it. but as i said earlier to senator klobuch klobuchar, you know, we have to rethink everything that we know and everything that we've. doing relative to safety.
and so while i think it's an exceptionally good agreement that immediately provides significant benefits to the public on safety, it doesn't change the fact that as we look at the entire process from the time the product comes out of the ground until it's delivered to the refinery that there's more work to be done. >> thank you. i would ask administrate or -- with the new truck driver rules put in place of july 2013. do you think they're having a substantial impact on productivity? i'm curious and i wonder how your department is going to measure and confirm whether any health benefits have really been realized. >> absolutely. and so the hours of service rule that was finalized in december
of 2011. as you note, went into full effect last july, is identified with rigorous analysis to project a impact of saving up to 19 lives per year or at least 19 lives per year and avoiding at least 500 injury crashes, and significantly more crashes and overall net benefit to the nation. there was also clearly in the analysis a recognition of the economic impact on industry. a recognition and analysis that identified about a $500 million economic impact cost to industry. a small portion -- or some portion is a cost to the law enforcement partners across the country they went through the retraining. your question is to the point of do we think that has happened yet? what do we think has happened yet? there's an economic impact on
industry. we identified through an unprecedented level of both analysis and solicited public input throughout the rule making process as much fact and information and data we could muster from all parties to make sure be we were analyzing the component of the industry that the rule would effect. it's on the long haul over the road. irregular route driver. what we've seen in recent months, i think you have probably heard from some of the individuals is carriers whose schedules are not necessarily regular route, but they are scheduled service to their customers, that still exceeds a 60 hour-seven day week are feeling the impact of the rule as well. early on the estimate was over all about a 3% impact on productivity for some of the sectors. with regard to the safety benefits, we -- the way crash and injury data is reported we don't have the data yet to show.
but we know that it is having an impact. and continue to press forward with the rule that is in place and will press forward. even the rule making to a robust analysis of fatigue, of measuring fatigue, of monitoring and measuring the impact of the rule itself going forward. with new technologies we have the ability to do it much better than before. the electronic logging guys, on board and monitoring of driving. all is part of the analysis going forward. it's important to reflect on a history of our service rule making. because much like what administrator szabo described, we all agree we want to get to safety. and motor carriy industry no different. we want to strive to zero fatality. there's different point of view to get there. there's a great deal of agreement in the middle.
in the case of the hours of service rule, one side of the argument felt we didn't go far enough in the modest changes we made. in the other side, they say we have gone too far. both sides took us to court and the court, for the first time in 15 years of litigation over hours of service. the court deemed that the agency, i think the court's own language we think the agency has acted reasonably if incrementally in restructuring of driver health and safety. we have a rule that has withstood that challenge. it's important, in our view, we continue the analysis we view. let's get through several years of this operation. let's begin the data collection now. and the analysis now. >> do so you a time frame when you'll be able to confirm that, a short answer? >> no. i would like to follow up with a clear time line. >> thank you. thank you, mr. chairman.
>> thank you. senator ayotte. >> thank you, mr. chairman. administrator pharaoh, it's my understanding that your agency is planning to move forward on an issue of increasing the minimum insurance requirements for the trucking industry, gnis that true? >> we have recommended -- we are moving forward to gather data. so yes. >> in doing that, will you commit to ensuring that you comply with a motor carrier active 1980 that says that the sector shall also include an estimate of the impact of the regulations upon the safety of motor vehicle transportation, the economic impact on the motor carrier industry, including but not limited to, small and minority motor carriers and independent owner or operators. the ability of the insurance industry to provide the designated coverage. >> yes. you have my commitment and the agency's commitment. >> very good. will you make the information public in your analysis? >> yes, we will. as we do.
we'll hope comments, if we aren't going far enough, we hope comments will get there. >> thank you. i appreciate that. i want to followup on the hours of service rules issue. i have calm ouple of questions. as i understand you talked about the rigorous response to senator rischer's question. the rigorous analysis in issuing that rule. and the federal motor vehicle carrier released the result of the map 21 mandated study on the real world impact of the hours of service. that was something that was recently released, correct? >> that's correct. >> so i sum when you're talking about rigorous analysis that's what you're referring to in part of the analysis is issuing the hours service rule. >> it is an example of the rigor we use. it is, in fact in relation to the two lab studies. >> so i want to ask you a few
questions about the study. >> sure. >> this study point out that drivers operating under the old rule had greater lane dev yagss, as i understand it. what was the difference in sent meters between the two groups of drivers? >> so let's back up. i can put in context. the study in question was a study actually mandated by congress. >> right. for a good reason. because many of us have heard deep concerns about the hours of service rule and how it is impacting the economic -- economically jobs. and so congress obviously asked you to do a study as a result of it. >> yeah. fair enough. and it was very carefully scripted. the language was scripted and constrainted us from doing the broader naturalistic analysis going forward. >> so i'm sorry. i want to make sure i get a couple of these answers. you feel the study -- let me get to the heart of it, then.
you felt that study was constrained because the study itself, as i understand it, only included an average of less than 12 days worth of data with 106 drivers, is that true? >> it's true that it contained close to a half a million miles. it included for each driver 12 days of driving. with 106 drivers, correct? >> correct. >> you think that's a large enough sample? >> the study requirements were very closely tied by statute. >> okay. but -- do you think that's a large enough sample to draw a conclusion? >> interestingly enough it's the largest naturalistic study done. it's statistic lay very relevant study. there did the study show that drivers operating under the new rule were more likely to operate during daytime hours than nighttime hours? >> it reflected that drivers who are most impacted by the rule
changes, specifically 1:00 to 5:00 a.m. sleep requirement if they use the restart are most impacted. so the nighttime schedule driver is the most impacted driver. >> so my question to you is that under this rule, we are going to have more drivers driving during daytime hours. isn't that true? >> that is part of what we continue to analyze going forward. we have not seen that. it's an increment impact and in the mix of the commercial traffic that starts early morning across the country. we think that impact is far outweighed by the improved driver safety >>well, you would agree with me there's a higher crash impact during day? >> yes. it's a higher concentration of traffic during the day. >> one of the things i'm hearing from my constituents is because of the new hours of service rule they actually are going to have to put more trucks on the road during the daytime hours, which are the highest crash times.
because obviously there's more traffic during the day that you could interact with. and so have you come up with data as to how many more trucks are going to have to be on the road because of the new hours of service rule during daytime hours that, again, in some ways, i think, could undermine what you're hoping to accomplish with the rule? >> the analysis in developing the rule did identify a marginal impact, but again, outweighed by the improvement of a better driver. >> do you know how many more instructs are going to have to be on the road during daytime hours? and do we have analysis of those numbers so we can understand, a, the impacts on congestion, b., the impacts on potentially, i suppose, the environment as well. c, the impacts on more crashes potential because we have more drivers and congestion during
the daytime hours. do we know the answer to those questions? those are core element of data collection rule. the rule has been in place now. everybody has been operating on it for 11 months. so, again, we are gearing up for doing improved and additional analysis with new data. >> see, here is the problem we face. you're gathering this data and yet what i'm hearing already from companies is that have to operate under these rules, both large and small, and have a significant impact on our economy is that they are going to have to drive more during the day. they're having to put more trucks on the road. so by the time we have this data instead of having done the analysis in advance, we can have a situation where we are not having the impact we want to have on safety. number one, which we want to make sure people are safe and secure. and secondly, we see the negative impacts on the economy, which i'm shocked at how many
businesses are coming up to me telling me about the impact of this rule. it's not just long haul businesses. i was with a short-haul beer vi distributor this week. they require the long-haul to get the product to them and then they drive short-haul distanc d. i think there are many impacts to the rule. my concern is we have gone forward with it without the type of analysis of how many more trucks we'll have on the road as a result of this. >> again, we did significant analysis in the rule making process solicited as much data and information we could possibly solicit. what has clearly transpired is that the trucking industry is hitting profitability lefts they have never seen before. it's among the strongest period that the trucking industry has ever experienced when you look at their returns. they are healthy. it has not been an easy change for all companies. the vast hijackerty, 85% of the
industry out there is operating is based on the analysis we had done. there are those that had to make adjustments and many have made the adjustments. there are some for whom it has been harder. i recognize that. i started last december saying let's walk through the logbooks and look at the experiences you are having. let's get the facts. i was out in minnesota, i was in down in arkansas, we just had a meeting in virginia recently. again, we are very -- i'm committed and the agency is committed to gathering the kind of data to recognizing where the impacts are so we can build the right analysis going forward. >> i appreciate that. i know, my time is up. in new hampshire we have the largest wholesale -- food wholesaler in the country, c & s. they're seeing a significant impact because of having to get food there on time and seasonal issues. you know, and also weather
issues which are significant across the country and in new england. i would ask, also, that you take their concerns into consideration as well. thank you. >> absolutely. >> thank you. senator rubio. >> thank you, mr. chairman. thank you for being here today. administrator, thank you for being here. i want to talk about florida. currently proposed the public benefits of that project were largely concentrated in the areas like west palm beach, fort lauderda lauderdale, miami, orlando where the stops are. it would impose some costs and impacts to all local governments along the corridor. in particular, there's a feeling along the corridor in some of the areas that don't have the concentration that there are virtually no public benefits provided to them, but all the costs that come along with the project. we're hearing a lot of concern about that from our constituents. in particular, i want to ask you a couple of points and see where
they are in regard to the midst of conducting an environmental impact statement for the project. i heard constituents and local officials who support the project. i have heard from constituents including many in the treasure coast, which is north of west palm beach, expressing concerns about the impacts this could have on their community. the issues they're concerned about are safety at the gate crossings and noise pollution. i passed the comments along. i hope the agency has reviewed them. can you share with us whether you are taking these concerns into consideration when you're making assessments and conducting oversights over the projects. >> yes. senator, it's really important i strongly encourage you as well as all citizens to stay engage inned the eis process to make sure they get their concerns, you know, their voices heard and gets on the record in the process. that process, in fact, is what is used to make sure that the
concerns get addressed, you know, as the project moves forward. so, you know, yes, we're hearing the concerns and making sure everything gets forwarded to the record. rest assure there had will be a robust process with public hearings and for, you know, those people that have reached out to us. we'll make sure they're aware of the public hearings. we'll make sure they're fully publicized. all the concerns get on the record. we ensure there are measures to address these concerns as part of that record. >> let me ask specifically about safety. there's already beconducted on e west palm beach to miami segment. an issue finding of no significant impact. they list over 120 locations for are proposed crossing upgrades. is the fra proposing the crossings be updedicated or recommended by florida? >> we intend to hold florida to
the highest standard of safety. we have guidance that is out there for the great crossing protection approaches and systems that we expect in any of our, in this case it's not high speed rail project. it's a regional express project. there's standards for that. we expect the high bar to be met. >> it's safe to say that the fra is monitoring the crossings to ensure they are upgraded and ensure the public safety is protected. you're not just deferring to florida on issues like crossing? >> no. we plan to hold them accountable on that. >> on the funding side, as you might be aware, they applied for a railroad rehabilitaion and financing loan. my question about the review of the loan. does fra strictly look at the financial statistic and proposed plan when deciding to aware the loan or take local comments and concerns like the safety and environmental ones i mentioned into account as well? >> when it comes to the loan it
comes to two simple questions. eligible? yes. can we make a finding of repayability. it's a financial -- >> that's right. when it comes to the loan, it's not about public policy. is tell jibl and can we make the documented finding of repayability. it's a financial transaction. the eis is the process that the public needs to continue to use to make sure their voices are heard and their concerns get addressed. >> i have one last question that has to do with sun rail. a different project. go to orlando. exactly. a new commuter rail system for those not familiar with it. it started operations last month. there was an incident where the car stalled and struck by a train. luckily no one was injured. it prompted calls for additional safety measures on the system. in fact, yesterday the florida highway patrol announced it it's going to be patrolling sun rail intersections to make sure drivers are following the law.
is fra looking at the incidents and what role do they play in recommending safety precautions or improvements? >> are we looking at it? absolutely. it comes back to a couple of things. first off, the three fundamental premises, the three e's. education, enforcement, and engineering. we need to make sure we are advancing all of this. i take you back to what we're proposing in grow america. there is significant benefits in there relative to great crossing safety that continues to be our biggest challenge nationwide. i talk about the dramatic drop in rail incidents, accidents, injuries, fatalities, across the board. one vexing challenge we is on great crossing safety and america there would be funding available for local communities to make enhancements. we need, to the extent possible, to advance sealed corridors.
eliminating them with the strategic placement of overand under passes. we ensure the sufficient flow. as you work through the process and public hearings and announced via how can my constituents best know where and when these hearings take place and how best impact? >> there is significant public notice but make sure your office is aware. t not just going to be the traditional public approach to make sure your office is aware of those. we'll work with the congressional dell gracious in senator nelson's office in making sure we get people to turn out and, in fact, are engaged in the process. thank you. >> thank you. >> thank you, senator rubio. the record should note that senator nelson was here earlier and expressed to me in the areas of inquiry and hoped to return.
i'm not sure he'll be able to do. i want to come back to the penalty issue. i think that the record here of minimal and minuscule penalties really is em blematic more than symbolic of a problem that really spans the entire area of scrutiny and pertains to other agencies as well. to come back to the incidents, wouldn't you agree with me that the $5,000 penalty under the circumstances neglect the severity of the consequences, the seriousness of the safety violations is atrociously inadequate as a measure of what happened here? >> senator, i don't know the specifics on those two cases, but i know the process we go
through and are required to go through when we assess fines and take a look at the severity of the violation. you have to realize that the penalty is relative to the violation not necessarily the outcome of that violation. so there's got to be a -- >> what would you say not necessarily? >> a direct connection. >> when you say not necessarily it can be. >> senator, as i understand it in the one case in 2009, before i was with fra, it's my understanding if i've been briefed properly it's relative to radio procedures that occurred after the fatality. it had nothing to do with the fatality itself, but it was a failure on the part of the engineer or the conductor to say the word emergency three times. which is required under our radio regulations. you have to say emergency, emergency, emergency before you
start speaking. and so the fines for his failure to say that. but the point i make we have to make sure we have a legally sustainable position. you know, we use the penalty schedule that is in place. >> what is your explanation of the incident? you were the agency at that time. >> yeah. i'm not -- which specific? >> a worker was struck on the west haven line after -- >> you knowly say this clearly -- >> prevent a train from going on the track where he was working -- >> clearly -- >> the railroad failed to have in place basic technology that was state-of-the-art for railroads around the country. >> our regulation will address roadway worker prevention. the fact that regulation final rule should be out should be out. we're targeting for september that will require the appropriate protections for all
roadway workers. in fact, would address that case. coming back to the penalty itself. >> issue regulation that might have saved his life. >> yes. we have already been in the works. that's been in -- >> why wasn't it issued earlier? >> it's part of a pipeline, senator. i can't just -- we have a process we have to go through. my agency is the first step in the process. then it goes into clearance with the office of the offices upstairs, the offices by -- of the secretary. then it goes over to omb. our regulatory approach is for us to continue to constantly come up with rules that feed into that pipeline, come through the pipeline. there has to be the appropriate periods of public comment and review. it's a never-ending process. we're constantly feeding them through. it's one of the rules required under the safety improvement act. it's been in the hopper and
moving through the pipeline. >> how long has the rule been in the pipeline? >> i don't know when it started. i know, this, we complete some kind of regulatory document more than once a month. we complete about 15 a year that, you know, we put into and move through the process. it's a never-ending flow. you know, senator, not only did the rail safety improvement act require of us an unprecedented number of rule makings, regulation studies and reports, also, tate promised us 200 additional employees, you know, positions that were not filled or at least not immediately filled. they have been partially filled now, but we work every day as effectively and efficiently as we can with the resources that we're given >>well, on the rail safety improvement act of 2008, the inspector general at the department of transportation found just last year ago april that nine of the 17 mandated
rules had not been issued. as i understand that two have been issued since then. when are the other six rules going to be issued? >> i know that i would have to actually take a look with the 4 r. there are a couple of them, i believe, waiting on the training standards. some have to be queued up. >> can you give us dates when the rules will be issued? >> for the record, i can provide them to you. i can give you an update where the pipeline is today. the final amendments on positive train control are due to be out this month. training standards for railroad employees is due to be out this month. the risk reduction program for freight railroads, the notice of proposed rule is due to be out in april -- i'm sorry, august. our systems safety program for commuter railroads, the final rule that we're targeting for october.
the roadway worker protection i was talking about, that final rule is scheduled to be done in september. passenger equipment safety standards for high-speed train sets. the notice of proposed rule is due to be out in november. our fatigue management plans, the notice of proposed rule is targeted to be out in november >>well, i think you may have covered them -- some of them. some of the six. because these outstanding rules involve risk reduction plans -- >> yeah. that would be final risk reduction will be final in october -- >> emergency breathing apparatuses. all of those six rules will be finalized in november? >> emergency breathing apparatus will not. we have a significant challenge there with the cost benefit ratio. obviously any rule i promulgate has to go through a rigorous cost benefit ratio. we have to be able to improve that the benefits of, you know, equal or outweigh the costs.
we've got a real challenge on finding a cost-effective way to advance emergency breathing apparatuses. >> so we're clear, these are rules that were authorized and required by the law approved in 2008. here we are. six years later. they haven't been issued. what is the reason for that delay? >> we prioritize our rules and move them as efficiently and effectively as we can through the pipeline. the highest priority for us, obviously, was positive train control. that was the single most important regulation we can get out that have the greatest benefit to the public on safety. and the complexity of that rule, the need to go back and make amendments to it. dealing with the suits that happen with rules. coming up with, you know, trying to get a cost benefit ratio that would work.
we feed them into the pipeline and advance all of them as quickly as we can. the number of rules that were required of us was an unprecedented level likely unmatched by any other period of time in the agency's history. the ntsb has 56 open recommendations to you. for some of them the fra has given a quote, unquote, unsipble response. in fact, on 29 of the recommendations, meaning that the fra failing to move in the right destruction to implement those recommendations. i also understand this is the highest number of open unacceptable recommendations for any entity within the united states department of transportation. some of these recommendations concern rules that you mentioned
earlier could have prevented the metro north catastrophic incidents, for example, inward and outward devicing -- >> senator, that would not prevented that accident. in fact, now. don't get me wrong, we believe they have safety benefit. that's why, you know, back in 2013, we choose to make it a part of our rule making program of 2014 engage it on. certainly will help an accident investigation. there are safety benefits. but, sir, it would not have prevented it. in fact, the requirements we put forward is emergency order were in fact the very steps that were appropriate to immediately eliminate the risks. the signal upgrades, the civil speed, you know, restrictions
enforcement. as i said, every rule that we want to promulgate has to go through a cost benefit ratio. we're not allowed to take the benefits twice. the benefits of preventing that are being captured in the positive train control rule. when i go to advance a rule on inward outward facing cameras. i'm going have a schedule relative to my cost benefit ratio on what it would prevent it. this is just one of the challenges that, you know, as agencies we face. it's part of what we deal with. but we attempt to deal with effectively >>well, i am not here to debate you. my point was not that it would have that there was any servety that would have prevent ed it bt
that it could have inward and outward facing cameras could have provided a deterrent to that conductor in nodding off. in other words, his knowing that he was on camera. there are a variety of other rules here that might have similarly prevented it. including research that would mitigate fatigue, which is recommendations -- >> again, that's about to be completed. our fatigue mitigation plans will be required under the risk reduction systems safety program. >> rules that would have greatly enhanced inspection practices that might have prevented the derailment in bridge port, which resulted from the failure to inspect and maintain properly that track causing the joints to fail and the derailment to occur. you observed yourself that there
were actions that might have been taken by metro north and actions that could have been required by fra rules that would have prevented these -- >> we go back, senator, after every accident, no matter how large or how small, to review what we can do differently. it's all a part of our drive for continuous safety improvement. our approach -- we use our data to -- it goes into a computer model to allocate our resources. it's, you know, staffing allocation model. so we use our inspection data to ensure that we're strategically deploying the limited resources that we have. as you have noted before, we only have the resources to inspect about 1% of the nation's rail track age each year. we have to follow the data. it's been so effective in
driving this 95% drop in accidents, injuries fatalities to record lows. >> let me just say -- >> wouldn't you agree with me that these rules have to be issued more quickly? >> i wish that was feasible, senator, but, you know, all i can assure you is that resources -- >> what did you need for it to happen? the important thing to note here, it's a matter of growing the entire pipeline. even if you give me more resources, which of course i always love, you know, to have more resources. all that allows know enter the rules into the pipeline more quickly. but there's still going to be a bottle neck having it flow through. it's a matter of resources at every step of the process. the point i was coming back to to, sir, i believe we can continue to improve safety every day. every day, you know, in '13 we had fewer accidents than in '12.
in' 12 question had f in' 12 we had fewer accidents than '11. i was talking about our data base approach to selection. there's no question when you take a look at metro north. if you take a look there was no data in either case that would have triggered the fact that there was an extraordinary amount of risk there. and so while we should not throw away what has worked so effectively for us the past decade. there's no question we have to lay over on top of additional steps. under grow america i'm talking about a 3-pronged approach. we continue our data based oversight and enforcement program. but we have to get to the second step, which is the progressive risk reduction, risk analysis programs that, one, will be
required in the systems safety program that final rule will be done -- what did i say the target is for october of this year. over and above that, it gives us resources we need to make considerable calls reporting a nation-wide program. and we think that is critically important, you know, from what we've seen in the pilot projects where this has been implemented most notely or most mature pilot project. there was a 70% -- 70% reduction in accidents. we believe it has tremendous potential to get us to the next level of safety. in that regard, senator, i had told you i had promised you when the deep dive report was done. we're going use it as a learning tool for the entire industry and for my agency. and i called together all the community railroads across the
country. metro north hosted us. there was a hundred in the room. we went through the report, you know, did a -- had a lessons learned discussion on it. then had an open discussion on them. based with the new knowledge, what are you going to do. what are each one of you going to do to be more proactive and identify and mitigate the risks well in advance? a very robust discussion. based on that, i am meeting with the commuter rail ceos in about 10 days. at their meeting -- you'll make that meeting. we won't keep you that long. >> we might. but senator i'll have to make the meeting. we're going have a full-blown, several hour conversations on close calls. about president of the union pacific railroad who had the most successful project is flying to the meeting to engage with the ceo and share his
experience and why he believes it has so much value in advancing safety. two reasons. all have commuter properties, you know, within their jurisdictions. so i wanted them to be a part of the conversation. but then we all came back here to d.c. and spent a day together taking look at and talking about those things that we need to do differently. we're doing good work we know we must do better work. we're at the record-low number of of passenger fatalities fwhau doesn't bring back the lives of those four people that perished on metro north. i know, i own that. our goal is to get to zero and stay there. and with what we're proposing and the grow america act, i'll have the tools to get us there.
i'm giving you the floor to provide a full answer. i appreciate your doing so. i want to make clear to you that the critical questions i've been raising are not directed at you personally or even solely at your agency. they're really directed at the broken system for rule making. what you've referred to as a pipeline is more like a obstacle course. written with hurdles that are n insourmentble. it's a broken system not only for your agency and your rules, but for many other rules in the federal government. and so i hope we can use your agency as an example of how the system can be improved.
because we can debate whether specific rules -- automatic train control as distinguished from train control. whether the basic safety measures could have prevented. no one can say they would preve prevented. >> senator -- >> the point here is they should have been issued long ago. the recommendations made by the ntsb should have been implemented long ago, and that may be an issue of resources or complexity of decision issues or the failings of the administrative system itself anyone the administrative procedure act. one way the system has to be reviewed and changed. >> thank you for indulging me, senator. because, you know, i take this very, very personally. it's personal to me. as said, i come out of the
rankrank s. i've had my share of close calls. i don't know any railroaders that hasn't. i've had five friends killed on duty. i've been to the funerals, i know the families. when it comes to safety, it's very personal for me. and, yes, i want to achieve perfection. we're not there yet, but every year i've been here, and frankly, my last two predecessors every year made continued progress and, you know, my staff knows it's all about continuous safety improvement, and, senator, i can't tell you how much i believe in this team of professionals that i have. they work so hard in a mission that is personal for them also. we're truly on the same page with what it is we want to
achieve. >> let me ask you about the deep dive report. >> yes. >> are you satisfied with metro north's response so far? >> at this point, they have certainly said all the right things. from what i've seen, i'm seeing the right things, but, you know, it's going to take time to play out, you know, my deep dive team continues to have a presence up there to monitor the compliance with what they have promised us. we continue to meet with senior leadership every 30 days. we also continue to meet with the labor folks up there. to hear what we hear from them at the ground level, but certainly when i talk with joe and tom. i'll be meeting with them personally this week. i think they're in to see me on thursday, i believe. the appropriate level of commitment clearly seems to be there, you know, they understand -- as i said we do
the job we have to do to regain the confidence of the riders up there. i believe they're up to the task. >> so fair to say they're saying the right things but the jury is still out on whether they're doing the right things. >> they're saying the right things, we're seeing the ring things in initial steps. there's a lot of work there. it's going it take time. when it comes to changing safety culture, that is a drawn out process. it doesn't happen overnight. and so it's going to take just continued, continue d reinforcement. i believe they're heading in the right direction. >> on the 100-day plan they have announced and promised to fulfill, in fact, by june 11th. we're coming close to it. have you been working with them on that 100-day plan? >> staff has been engaged. yeah, my regional administrator is up there on regular basis. as i said, even parts of my deep
dive team, which i brought in from across the country from other regions have been engaged with them. so, yes, we're -- they're cooperating with us. we're cooperating with them. and we're monitoring their progress. >> and do you have a view as to whether that plan will be, in fact, achieved? >> as i said, it at least at this point, they are clearly on track to achieve what they have set to do and it becomes our job to continue to monitor the progress. >> do you have any assessment as to why the metro north bridge that went down recently failed to open or failed to close once it had opened as to what the reason were for the mishap? >> we will get you a fuller explanation for the record, but
si as i understand it the bridge is well over 100 years old. it speaks to the state of the infrastructure. particularly on the northeast corridor, you know, as one of the things that our proposal under rural america is put together. making sure it's more safe, more reliable, and more efficient. this asset on the northeast corridor, you know, is one of the prize assets. it's one of the best passenger rail markets in the world. in the market. but because of the decades and decades of disinvestment, it's never reached the fullest potential. that's the case in that bridge and, you know, the concerning thing there are so many other bridges and tunnels on the corridor of a similar age. >> and again, it's not just about the metro north railroad or even northeast corridor senator coops noted for me and
wanted me to ask you about a bridge on i 495, which late yesterday encountered a similar problem. it's a bridge over the christian river, i believe in delaware which has now been shut down. its closed indefinitelily. it carries about 90,000 vehicles a day. it will have a huge impact in creating congestion from florida to maine. >> yeah. >> actually in trucking. >> you know is this a rail bridge or a highway bridge. this is a highway bridge. >> okay. a highway bridge. >> the two rail bridges, you know, there are a couple of elements of grow america that help with railroad bridges. i talked about, you know, the two pieces the one for amtrak to be able to bring you know their railroad to a state repair.
that's a critical part and the second piece for other corridors to be upgraded through competitive grants. these are the kind of infrastructure improvements we are talking about. the last one i want to touch is a grant program for short line railroads. and i think this is critical, particularly as we talk about the movement of crude oil. the class one railroads for the most part can take care of themselves. they have deep pockets, but the short lines are very capitally constrained in what is a very capital intense industry. and so there are bridges out there, there's track structure out there that have not been upgraded to modern standards. so in grow america, we're advocating for competitive grants for short line railroads to make critical safety upgrades to bridges, critical safety upgrades to track structure, to be able to safely haul heavier loads, and critical upgrades to signaling system for short lines.
so, we're looking to address this in our proposal. >> i think one of the problems we can agree, and maybe this initiative pertains to all your agencies, is the resources available or enforcement? and as you well know, senator schumer and i advocated successfully for an additional $185 million in the last fiscal year, fiscal year 2014, which was to hire 45 additional critically necessary safety instructors for your agency. can you tell us what the status of the hiring is for those -- >> yeah, we moved immediately. now, again, you don't just snap your fingers and have 45 people in place, but we have moved immediately on the first 15. ten of them have, in fact, been hired. but senator, to be clear, it takes about a year. by the time you recruit, hire, go through the training that is necessary, it takes about a year
to be, you know, a qualified inspector, to be turned loose on your own. but we've moved right away, when there is, you know, an opportunity for more resources, we're not going to wait. >> do you need more? >> senator, it's my job to ensure the safety of this industry with the resources you choose to give me. so, you know, certainly -- >> we can only give you what you request. we can give you more, but the best indication of whether you need more is whether you request it. >> yep. >> it's my job to work with the resources that i have. and to strategically deploy, you know, that's why we used the staffing allocation model to make sure that we're as effectively deploying as we can. >> and i don't want to put you on the spot here, but i would like to ask you for the record to provide me with an estimate,
as specific as possible, for the additional resources you need for enforcement. and i would like to make the same request of all of your agencies. >> thank you, senator. >> not to be critical of what you've done in the past, but simply to show what we need to do adequate enforcement, the rules and laws on the books, if they're on the books, and they're not enforced, they're dead letter. in fact, they're worse than dead letter, because they encourage noncompliance. people who know that rules aren't going to be enforced aren't going to obey them. when the penalties aren't sufficient, there's no incentive to obey them. they're part of the cost of doing business. the big companies that you regulate will thumb their nose at your agencies, which is to say at public health and safety. so i'm going to ask that for the record and let me just conclude these questions. my understanding is that the
maximum penalty for the violations of was $25,000. and that in the case of egregious and aggravated cases, the maximum is $105,000, is that correct? >> i believe that's correct. for the record, i can confirm that for you. those are established via statute. but there's others elements that come into play when determining how much in particular violation, you know, what we'll be able to sustain with the fines. so it's not for every violation that's out there that we can instantly go and levy the maximum against them. >> can you give me examples of when the maximum of $25,000 or
$105,000 have been opposed? >> we'll get you that for the record. that way we can let you know what the history has been, those cases where that may have been done in the legal basis that was in place, to support that. >> how quickly can you provide that for the record? >> i'll put staff to work on it -- >> these are cases that have already occurred, they've already been imposed. i'm asking for examples of them. >> i will put staff to work on it today, senator, but there's a clearance process on everything that we provide. >> why was the lewden death on those tracks in west haven not an egregious and aggravated case? >> for the record, we'll get you, again, what we believe was the legal basis for our fine. again, senator, i want to come back to something that we said earlier, that the purpose of fines was to ensure compliance,
it's not necessarily to punish. and you know, the hammer is but one tool that we have in our toolbox, and we need to make sure that we have multiple approaches to drive continuous safety improvement. >> well, it may be only one tool, but it is one of the preeminent tools. and when you fail to use it, you are leaving yourself essentially -- >> well, as i said, senator -- >> -- worse -- >> -- the five years i've been here, we have, in fact, set a record for the highest dollar amount of fines levied for any five-year period. so with the bills i have, we're doing what we can do. >> but i'd include on this point, is only one of minuscule penalty, $5,000 and $10,000 over that period of ten years that's been documented. >> you know, senator, certainly,
we'd be happy to work with you on some technical assistance if you would like to take a look at legislation that addresses our penalty schedules. >> well, if i were in your shoes, i would be advocating for more authority. >> we'll work with you. >> let me ask you, talking about answers for the record, when you were last year, you promised some answers. we still haven't received them. >> they've been completed both by me and my staff. >> i worked on those personally. staff has prepared them and they're in the clearance process. i certainly had hoped they would have been delivered to you in advance of this, but you should have them very shortly. >> they're noin the pipeline? >> that's right. >> when are we going to see them? >> i can't answer that, other than to say that i believe it's very close and it wouldn't surprise me if it's this week, but i don't recall thcontrol th
piece. >> well, i'm not going to put you again on the -- i'm not here to embarrass anyone, but i would like to know who has to clear them? whom should i contact? >> we can -- for the record, i'll get you -- in fact, i believe in the q&a that you proposed to us, we've got in there the process that is used for clearance. it actually was relevant to at least one or two of the questions that you asked me, so, you know, you'll have that information. >> i thank you all for being here today. and i hope that we can continue this conversation. i have additional questions. for the record, i don't want to detain all of you here. i understand my colleagues may as well, so we're going to keep the record open for a week and, again, my thanks to you for spending the time with us and being so forthright and helpful. the hearing is adjourned.
>> during a news conference on veterans' health issues, arizona senator john mccain talked about the release of army sergeant bowe bergdahl from taliban captivity. you can see the entire event online at c-span.org. here's a little of what senator mccain said. >> this agreement is, in my view, puts future men and women who are serving in the military at great risk. these individuals were judged as in guantanamo, frequently, that if they were released, it would cause a great risk to the men and women who are serving on the battlefield. these individuals, as senator graham calls them the fab five,
i believe, these individuals will be able to move around qatar. and after one year, according to the qatar spokesman, they will be able to go back to afghanistan. 30% of those who have left guantanamo have already reentered the fight. this is the hardest and toughest of all. one of them is wanted to have murdering shiite mus lil's when he was outside of kandahar. so this decision to bring sergeant bergdahl home, and we applaud that he is home, is ill founded, it is a mistake, and it is putting the lives of american servicemen and women at risk and that, to me, is unacceptable to
the american people. thank you. [ inaudible question ] >> no, they were al qaeda. members of al qaeda too. yeah. [ inaudible question ] they were associated with and part of the taliban. i'm sure you're aware that in 2001, the taliban and al qaeda were working together, which is the reason why we went there. these individuals were working with al qaeda. [ inaudible question ] these people have dedicated their lives to destroying us. these people have dedicated their very existence. why do you think that when the judgment was made, that if they release them, it would pose great risk to the united states of america? [ inaudible question ] they are taliban and al qaeda. don't understand that? were you around -- yeah, like you said, you're an old man, you might remember that in 2001, al qaeda found a haven with the
taliban. that's why initially invaded afghanistan. because to somehow separate these people from al qaeda just damned foolishness. >> i understand your problem with giving up the five taliban cabinet members. i still can't get my head around applauding that bergdahl's home and opposing the -- should he still be in captivity under these circumstances or should he not? >> i think the deal should not have been made, as i've said many times. but i would make every effort and continue to make every refrigerate to bring him home. >> on a lonely, windswept point on the northern shore of france, the air is soft, but 40 years ago at this moment, the air was dense with smoke and the cries of men and the air was spilled with the crack of rifle fire and the roar of cannon. at dawn, on the morning of the
sixth of june, 1944, 225 rangers jumped off the british landing craft and ran to the bottom of these cliffs. their mission was one of the most difficult and daring of the invasion. to climb these sheer and desolate cliffs and take out the enemy guns. the allies had been told that some of the mightiest of these guns were here and they would be trained ton beaches to stop the allied advance. the rangers looked up and saw the enemy soldiers at the edge of the cliffs shooting down at them with machine guns and throwing grenades and the american rangers began to climb. >> this weekend, american history tv will mark the 70th anniversary of the d-day invasion of normandy, starting saturday morning at 10:30 eastern. watch this year's commemoration from the world war ii memorial in washington. and that's followed at 11:30 by author and historian, craig simmons. he'll discuss his new book. and at 12:30, mr. simmons will take your questions and comments
live. and at 1:30, a look back at presidential speeches commemorating the date, all on american history tv, saturday on c-span3. >> now an analysis of the recent european union elections and the strong showing of political parties critical of the union. speakers at the brookings institution include the british and irish ambassadors to the u.s. this is just under two hours. >> all right, we'll start. thank you so much, all of you, for being here. despite the rain, which kind of threatened for a little while, but has almost stopped, it's really wonderful to have all of you here and i think we'll have a very lively and interesting discussion. thanks to a truly fantastic panel. i'm so grateful that you've agreed to join us. and the timing is pretty good, you know, a little more than a week after the european
parliamentary elections in the middle of this debate that has erupted on the commission and many other topics to cover. we have isabelle kumar, who has the flagship program, the global conversation for euro news. isabelle came all the way from london yesterday. i'm sorry, from paris. i'm sorry, i made a mistake. and isabelle, for those of you who watched her, but maybe not everybody had a chance to moderate the first european presidential debate, although if i say that, i know peter and others, might say, what is he saying? presidential debate. but anyway, let's call it that presidential in short time, and of course we'll discuss why that is. and i watched it and i was really impressed by the
moderation. so we invited her and she was gracious to accept. reza moghadam, he's the department director for europe at the imf. he was, before that, the director for the strategy and policy department. i don't think i exaggerate in any way in saying that he is one of the top economists in the world, top people at the imf and there are few people, i think, who have as deep the knowledge about the european economy and the challenges ahead for europe than reza. i had the pleasure and sometimes the tough time to negotiate with him when he was chief of mission for the imf and i was on the turk irk side, but that was quite some time ago. there's my co-editor, jacques mistral. we have our book out there for those of you who want to get it later on. it's out in front of the door. jacques is a french economist, a
nonresident senior fellow at brookings. he's very modest, so i kept arguing with him with what i could put in terms of description on the handouts. he was senior adviser to the reformist french prime minister, he was chief economist at the axist group, both public sector and private sector experience, and one of the key organizers of the annual economist meeting, which meets every year and brings together economists from around the world. then we have two very dear friends, the ambassador of ireland and the ambassador of the united kingdom. anne anderson, i don't -- you know, i didn't check on every single position she's had, but she seems to have gotten all the important positions, among them, of course, ambassador to france, but, of course, to brussels, to the eu, so she's streextremely
knowledgeable about eu affairs. and to the u.n. too, to global affairs in washington, and reminded me that she also had negotiated much more recently on the irish program. but that was when ireland was already doing pretty well. and peter westmacott, previously ambassador in france, in turkey, where we became friends. now in washington. again, i don't think i can exaggerate one of the top figures of british and european diplomacy and really also different. thanks for being here, peter. and i tend to hire some of his staff. when we lose people, i draw on british embassy staff. so thanks a lot for being here. >> i think the degree to which the debate has erupted over who should lead the commission
president is somewhat surprising to a lot of people, we knew there was going to be a debate, there would be some horse trading, some negotiations, but i think it has become very serious, and i think this would be one of the topics that we have to address, not just in itself, i don't think the debate is all about the personality of jeanne-claude, who has a lot of experience, to be sure, but some say is a little bit representing the past of europe, not necessarily the future. but, you know, there is a whole current of thought and of belief now, that you cannot have an eu election like we had, we cannot have isabelle moderating these people, and of course i'll ask her what she thinks about it, you know, in the first-ever, really, historical polls -- i'm sorry, beyond borders political debate. i don't think there ever has
been a debate like that. and then somebody wins and then you say, well, you know, that's very nice, kind of entertaining, but now let's get down to serious business and choose the candidate. it's going to be difficult. i don't know what will happen in the end, but i think there's a strong enough foo that this shouldn't be the case and that the election should be taken seriously. and one sign of that is that all the center parties, the kind of mainstream parties, not the parties of the extreme right or the extreme left, but the liberals, the center right, the center left, the greens have all rallied behind younger. so it's the whole moderate spectrum. maybe not matt brown, but we'll find out. from the center for american progress. it's another one of the leading
people debating this in europe. so on the other hand, there is the view that, and that was expressed today in the "financial times," i just read it out to you briefly, it is above all in nations, with their shared kinds of language, history, and political culture, that democracy can leave and breathe. at a european level, you cannot replicate the forms of democracies, elections, political parties and so on -- sorry, you can replicate the forms of democracy, but what you cannot create is the underlying demos of the people that is needed to bind democracy together. and then he rubs it in even further. that is why you end up with the absurd situation in which walters is set to have chosen a leader they have never heard of. so you see there, really two very, very different positions. and i think thits one of the really key topics ahead of us
for the european institutions. i think behind that, there's also the whole issue of the future of the euro zone. and i think as the economist and director of the global economic and developments program, we're very interested in that. there's the view among most economists, i think most economists that i know of, that i've interacted with, and a lot of the u.s. economists, actually, you know, believe that you cannot have a union without having a much further degree of fiscal policy cookers. banking union, banking supervision, and therefore not necessarily political federalism, but something that comes quite close to a pretty high degree of political federalism, if you want to have a union. now, of course, not all of europe is a union, but if that is true, can you achieve that coordination at the technical, economic policy level, without having the corresponding
democratic space? and i think a lot of the debate revolves around that. not everybody agrees that you need that degree of policy coordinate, and i hope reza will give his opinion particularly on how much policy coordination is needed. but i would say, you know, a large majority of economists do believe that. and then that has some consequences, some political consequences, which are hard to face, but which don't go away. and i think that is perhaps the deeper dimension of the debate we're experiencing. so with that, let me turn to anne anderson first. anne? what lessons do you take from the elections? how do you look at the path forward, the european institutions, anything you want to share with us as a start would then have an interactive
discussion, but two or three main points what would they be? >> thank you for a very challenging introduction. there's no question about that. maybe to make a few points about the outcome. i think participation rates were disappointing in line with previous participation in european elections, but still when you have 43% voting, 57% of people staying at home, that points to a certain disconnect and apathapathy, which is a caur concern. and we can't forget in a way there are 28 separate messages here. we have 28 different member states, and as you always find, people are addressing their national governments at least as much as they're sending a message to brussels. but thirdly, and i think we have to recognize this, inso far as there was a european-wide message, obviously what all the
headlines have focused on is the 30% of the vote that went to the euro skeptic and populist parties and candidates. and that's a jolt, certainly. i think there always has to be concern when a climate is created in which extreme views are taking more of the space. so i think that certainly is food for very serious thought. another point i would make is in terms of the -- how it's looked at from across the atlantic here. i think there's no question about that, you know, europe is still going to be very much a strong, functioning partner for the united states, worries about tea tipping derailed and so on are out of place, but i do think there's something important to be said about the message that came from this 30%. because it's something we have to face together in europe and
in the united states. because, fundamentally, i think this was a message about fear of globalization and that there is really no question, but that, you know, europe is not the enemy, europe is really not the target. europe is a lightning rod for a lot of this discontent. people feel buffeted by globalization and they feel that they're at the mercy of forces that they can't control. and obviously, the united states is not immune to that either and you see the way those concerns are playing out among sectors of the population here. so i think it's something that's important, transatlanticly, that we take account of. i think in terms of what it's going to mean in europe, it's clear that the leaders have already said, it can't be business as usual. we're going to see some policy
adjustments. this has been a vote, really, about the economy and about growth in jobs, about austerity fatigue, and the european leaders are going to have to take that into account, and of course the challenge is, how do you keep the necessary fiscal disciplines, and at the same time, at least soften the edges of austerity. i think there are going to be issues about what we do and how we do it in europe. more relevance, less red tape, and i think that question that's been around so long, about how do we communicate europe to our citizens, that message comes into even sharper focus. in terms of what happens in the institutions, let's see how things play out in the european parliament. this 30% of the populous, you're a skeptic vote, if i can shorthand it that way, is a fractured vote, fractured between right and left. and you can see the difficulties
the right are already having in trying to create alliances between themselves. the 70% of centrist parties would certainly be incentivized to work even more closely together. so let's wait and see what impact this 30% has. in terms of the question you raised about the president, i'm not going to get into personalities, the arguments as you lay them out are there on both sides, but i do think that this result is going to make the european leaders look ultimately even more carefully at the qualities that they're going to require in whoever takes over this key role. who's going to be able to implement the kind of policies that are going to be there. who's going to be able to articulate a vision that has resonance for people in europe. who's the skilled communicator, which we clearly need. so i think, in the ultimate
decision, we're going to see people looking at those questions again and seeing who best ticks those boxes. >> thank you. and i hope you're right on the last one. it's so important. isabel isabelle, of course, as you reminded me in the heart of europe, continental europe, but on the debate, how did you live it? i mean, what impact did it have on your perception and how did you follow the campaign in europe? was it an important campaign or just the campaign restricted to, you know, a very small minority of european citizens? >> well, i think as anne said, there's 28 different campaigns going on, so it's quite difficult to follow all those campaigns. but i think the one that grabbed most people's attention, or the two, the campaign in france and the campaign in britain where everyone was expecting to make such big gains and they did. in terms of the debate, the debate was terribly exciting and tense and i think those are two
words, i think, have never been used together to describe a european election. because for the first time, you had these candidates in front of you representing europe. and they had to make their case for europe, but they also had to make themselves known. and our starting point when we had this debate wasn't, let's try and kind of eke out what different policies they've got. because in many respects, these guys are very similar. it was more, nobody knows who the hell they are. let's try to present them to our viewers so people can identify who jeanne-claude is, who martin schultz is, skar keller, one of the leaders of the green party. so that's what was very exciting about this. and also it brought home some truths that really europeans don't know who they are and it's not that interesting. back to what anne said, 31.3% of the electorate voted. so as a journalist, i found it
very exciting. so even though we have this great -- not great, but this interesting backdrop of the rise of your skepticism, we have the economy in so much trouble. people actually couldn't be bothered to vote. so the debates were great. did they fire up interest? the jury's out on that one. and so the song contest was probably followed more closely than the european elections. >> thank you. but just as a married of statistics, the participation in the u.s. congressional election, both the presidential year, and the off year, averages to about the same as the european parliamentary election. and the off -- the year when there's not a presidential election is actually less. so when we say that 43% is not very impressive -- >> but this time, it was billed it was going to be different. >> it's still a pretty -- >> it's okay, but do you have to judge yourself by -- well, i
wouldn't say the lowest common denominator, but if you're setting the target high, surely you want to beat your past result by more than 0.1%, especially when you have these kind of candidates standing there, who are meant to kind of fire interest in europe. >> i agree. i would be very careful before i debate you. >> but also, the rates in national elections in europe are much higher than elections year. >> that is true. it's a more politicized, to some degree. jacques, and i come back to all of you later, in particular on the economic side. but bringing the topic a little more on to the economic side, and you know, europe, after all, has gone through a very serious, not all countries have gone through a very serious crisis, even though germany in 2009 had negative 5% or something like that growth rate. but is there now an economic recovery? and how is the economics perceived and how can you link
the economic arguments to the debate? >> thank you. in fact, europe went through a debt crisis for two years. the critical question that has made for too long a euro breakdown, plausible possibility was, if i may say, was as simple as that. of the euro zone member countries, willing to stick together at all price, at all price, that's a politically terrific question. and it took two years of intense and political debates to offer a credible and positive answer. in june 2012 confirmed that union members adhesion to the monetary union and designed policy and institutional changes to make it properly function in the future.
ecb president later translated this decision into intelligible words. we will do whatever it takes. europe has exited the financial danger zone and is moving towards a stronger integration. it will not be perfect, was my guess is that it will work. on the other side, the crisis has dire circumstances. unemployment has skyrocketed in the south and social traditions have deteriorated. and the european elections and surprisingly are proof of many frustrations. but frustrations against what? against excessive immigration, possibly. against austerity in greece?
definitely. the european ordeal has been battered between a prosperous north and depressed south. but interestingly enough, two-thirds of the populous everywhere want to keep the euro. two-thirds in greece, in spain, in france, in germany among others. now, what is a political answer to these political feelings? first, the newly elected european parliament is no expression of a euro skeptic union. on the contrary, euro critics will have a louder voice in brussels, okay. but they are divided and let me be blunt but clear, they will prove much less influential than, say, the key party in
washington. much more importantly, my view is a vibe aren't and expected democracy, we are witnessing about the choice of the president of the commission. the pro-european parties have unanimously agreed on the name of the parliament's candidate. this approach had been explicitly sold to the voters. not expecting now would appear close to electoral fraud. my guess is that at the end, the parliament will feel empowered and this will prove the watershed in european politics. in short, those assigned to brussels, why pro-european maturity. and this parliament will exercise traction towards a more
integrated your zone that is definitely needed. the pro-european parties, from the south arrive, the greens represent the diversity of european constituencies. and this should work across, like in washington, in the past. and no build an explicit audition like in germany. this strategy would reinforce the perception of a cartel, which runs the e rurks to the detriment of many europeans. and that would precisely fuel the euro skeptic dispute between the people. finally, debates in brussels must now focus on pragmatic responses to the challenges facing the union and the states.
mostly, employment and protection. the major goal is to combine fiscal convergence that is good and away and to design a successful growth. challenges are daunting, but the latest news from brussels are clear, the euro zone is moving is forward. >> thank you. that was a very optimistic and forceful message. i do want to share with you that even i was sometimes worried. i think it would happen mainly for political reasons. but why i would say the large majority of professional opinion in washington was convinced that greece would exit the euro, jacques steadfastly defended the view it would not. so i just want to put that on record. reza, you're responsible for a lot of this stuff.
>> not guilty. >> as director of the imf department. can you tell us just a few words on the economy, in particular, how do you lick this populous, you know, and yet it's not a majority, but 30% is a large vote. how much of it is economic distress, unemployment, and also, you know, deflation now. the european inflation target is 2% or just below. it's now running at less than half. all hell would break lose if inflation was 3.5%, right? i mean, think about it, everybody would be -- >> it's below 1%, almost getting close to zero, and nothing seems to be happening. >> thanks. thanks for the kind introductions. i think before i come to the inflation story, i think let me
just endorse what you implicitly and jacques, explicitly mentioned, that the turnaround in sentiments, market sentiments in particular, over the last two years, is really remarkable. and i would add one other dimension into our perspective. if you look at the european project as an integration, an economic performance project over the last 50 years, it's a major success story. particularly, this year is the tenth anniversary of the new member states joining the european union. it's the 25th anniversary of the fall of the berlin wall. and if you take that perspective of integrating particularly the eastern europe or raising living standards in core europe over the past 50 years, i think the european story is a major global success. but having said that, let me now
come to my normal job. i think the challenge, what you mentioned, the relationship between economic distress and what you see in opinion polls and what is translated into election results is very striking, usually. and at the heart of it, at the moment, is the challenge of jobs and growth. what ann mentioned earlier. i think that is at the heart of the problems faced by europe and the unacceptable high levels of unemployment. and the question is, i think, moving forward, how to address that. because from a political social perspective. i think it is, again, remarkable over the last three years, four years, of economic stress that we have seen a lot of hardship. we have not seen the sort of social strife that we see, for instance, in emerging market crisis or we have seen earlier supposed of crisis in the world.
so the sustainability of that requires job creation. it requires reducing unemployment. and what jacques mentioned earlier, european economies, many of them, have very high debt. and, as you mentioned, inflation is incredibly low. when inflation is low, it's difficult to bring debt down. when debt is high, growth suffers. and so the i think number one challenge, this issue of growth and inflation are related, is short-term support through economic policies to increase growth in the short run. there's also a long run problem. i'll come back to that. but i think we have been advocating that there is need for supportive macro policies, given the high level of debt, fiscal policy, at least has to do new harm. and from this year onward, the stance of fiscal policy in
europe is neutral. so a big burden is on monetary policy. and i think our view has been, there is room for conventional and unconventional monetary policy easing in europe, and it is, indeed, necessary to create the room for reforms that increase potential growth later. we need short-term growth to come back to provide that space. so we think there is that need. it is encouraging the ecb is talking about action this week, and one hopes that -- >> the meeting is on thursday, right? >> they are meeting this thursday. they are talking that they will act. and certainly in light of the recent growth and inflation numbers, it is necessary to act but there's also a long-term issue. we calculate that right now, that potential output, what the european economies are capable of growing on average in the
euro zone is only half a percent. half a percent is hardly adequate to stabilize, let alone reduce unemployment. that rate of growth needs to be brought up. and that requires, and this is where the election results are a complication, one fears that they may stand in the way of neither reform, particularly labor and product market reform. but on the other hand, it is necessary for the growth to come back, to undertake those reforms. i would also say there are two other areas where it is necessary, at the european level, to move. in the u.s., as many of you know, their reliance on bank credit is much lower than it is in europe. in europe, the capital markets are not as much developed. corporates rarely go to the capital markets. they have to rely on their banking system.
their banking systems are weak. they're being assessed in order to strengthen them. but they're weak. credit is still falling. so developing capital markets in europe, i think, is an urgent task to increase that availability of credit and potential growth in the long run. and the other point i want to say is an issue we are currently discussing is that the current fiscal framework in europe, the governance of it, is worth looking at. the currently fiscal framework is based on a framework which is based on targets for deficits, targets for structural deficits. but when you have different levels of debt across europe, some very high debt, some lower debt, the same kind of targets do not make sense across. and as i told you at the beginning, given that debt is at
the heart of the debt overhang, not just the private, not just the public, but also private sector, you need to have mechanisms that look at debt and how to bring them down rather than simply on fiscal bottom line. thank you. >> stocks rather than -- stocks complement, right? peter? your day care on the latest events and let me ask you a more pointed question. i remember david cameron's very important speech, i think it was in january, the europe speech, which we originally wanted to give in netherlands but ended up giving in london. it was a speech that was awaited and he gave a strong view on his perspective in europe. and one thing that i was almost surprised by in that speech was the emphasis he put as a british prime minister on the need for the euro zone to coordinate and
to integrate further, in order to manage the euro. that was, of course, when the euro crisis was still in full swing, okay? as opposed to, for example, to the swedish prime minister, the finance minister, who a few weeks later said the opposite. saying that, in fact, that the euro zone integrated further, that could be the end of the european union. that was not at all the british prime minister's view on the euro zone. at the same time, it's quite clear that the uk will not join the euro zone in the foreseeable future and that the british prime minister as well as the british political leadership as a whole, not everybody, is quite fiercely opposed to further federalization or political integration in europe. so when you take these two things. on the one hand, yes, the euro zone has to integrate more. and we've heard both reza and jack putting forward arguments in that direction, with the
statement that of course the uk will never be part of that, what does it mean for the future of europe and for the future of europe where, you know, the uk is part of it, and for many other reasons, i think so many good reasons for why it should be part of it. was on that particular point, how are these two statements compatible? >> thank you. nice, easy questions. thanks for giving us the chance to join your panel. i won't cover all the stuff that ann said, which i entirely agree about the consequences of the elections and what it means about the state of europe. i'll just, perhaps, underline a couple of points. first of all, i think the rise of euro skeptic parties in a number of countries, not at least mine, but france, greece, and a number of others is a very significant development. there is one sense in which this is a traditional sort of protest vote. my foreign secretary, william haig gave it a free vote, where you can give the government of the day a good kicking, and you
would normally expect that at a time when the economy is difficult and you're struggling to recover from a recession and so on. but it also conveys a broader message. but as david cameron, my prime minister said, we can't just shrug off these results and carry on as if nothing had happened. we've got to focus on what this means. we need a new approach, which recognizes that europe is defective in addressing the needs of people, and it's got to focus a bit more on jobs and growth and making the european union work better and it wasn't only david cameron who reached that conclusion. the president of france, for example, has said that the european union has become -- i drifted down a couple of these words. europe has become unreadable, distant, incomprehensible, even for member states. this can't go on. and he made a point that david cameron has made, that is to say, allying member states to do what they should be doing and allowing europe to do what europe should be doing, which he's better done at that level
rather than at the nation state level. and the president also said, we need europe to be simple and clear, to be effective where it's expected to be, and withdraw from areas where it is not necessarily. and i think, you know, that's an indication, or so, of the sort of reactions that the wars amongst political leaders. the italian prime minister says the answer is better europe, not more europe, as a reaction to these elections. so i think it's a bit of a wake-up call for a number of european governments. and it is an indication that europe needs to prepare itself better for the future. to be more responsive, more democratically accountable, more flexible, more focused on competitiveness, doing the job better, if you would like, rather than just sticking with what many people would regard now as a somewhat out of date federalist, integrationist agenda. that, i think, is the attitude which conditions, certainly, the attitude of my government towards the appointments that
need to be made in the coming months for the future leaders of the european unions institutions. we need people who are focused on the future, who can rise to those challenges, who can make europe work better, respond to the messages from public opinion rather than, if you like, stuck in the past and business as usual. your second question, how do we reconcile these two different messages which come from the uk. well, of course, they are entirely consistent, as always, messages coming from my government. you know, i think there were two points that the prime minister is making. first of all, we have as much interest in the euro zone succeeding as any member of the euro zone. of the european -- of the currency union. we may not be a member of it, we have decided that we do not wish to be a member of the currency union, along with another 10 or 11 member states, but half of the united kingdom's foreign trade are with members of the euro zone. about 60% is without members of the european union. we need it to succeed. it gives us no satisfaction at
all, expect when we're dealing with people who told us we got everything wrong, to have a growth rate this year of 3.1%, according to the imf, whereas the european average is down at 1.2, 1.3, and unemployment rates are a great deal higher. we have every interest in euro zone solving its problems and getting on with it. and we recognize that if you are going to deal with the problems that come with having a currency union, but without having a fiscal monetary union, that the euro zone needs to be strengthened and we'll give our support to that, in whatever way that needs to be done. that's where the prime minister was coming from. doesn't mean to say that we are going to join tomorrow, as you rightly said, the united kingdom is not likely to join the euro zone tomorrow. we have to continue dealing with our own economic difficulties, like everybody else has to. we doped very deep. we went into a deep hole with our annual deficit. finances were up to almost 12% in the aftermath of the financial meltdown in 2008. we managed to half that since then, at the same time as having restored our level of growth
from a time only about 18 months ago when we feared we might have had a triple dip recession, the numbers got adjusted afterwards to having what is now, as i mentioned with, the highest growth rate in the g-7. it's going in the right direction, the deficit is down, employment are at a record low, more people in work than ever before. and with growth rates which are much better than the average. but it is still fragile and we want to move ahead with that. we attach enormous importance to the your poen union continuing to reform itself, completing the single market, becoming more competitive. so our enterprises are better able to compete in the world's economy. all that relates to the needs of all 28 of us. not just not euro zone. euro zone, we want it to succeed and support it in any way that we can and we'll need to, and if that means changing the rules of the game and strengthen the euro zone, that's fine by us. but equally, not at least because we are part of it, we want the europe of 28 to succeed
too. >> excellent. i must say, very impressive statement of the position. and thank you, peter. that was very, very articulate. and i think that in many ways, many of us hope for a strong european union at the department of the u.s. i mean, that kind of vision, if it works, would be great. just two more things, and then we'll open to the floor. one is the, if anybody wants to say anything about the u.s./eu relationship in a broader context. of course, you mentioned it, but will it be harder? maybe you want to say something about that, or anybody else? and the other thing i wanted to ask is if there was one person that came out hugely successful from these elections, it's the italian prime minister.
i mean, the -- his party is not going to have the second largest group in the european parliament. nobody has had that kind of percentage victory for decades. and the center right opposition, the difference in percentage points, 25% difference, and he gives the message in jeans and shirt that, you know, peter, you quoted part of it quoting better europe, not necessarily more. he also clearly says less austerity, but more reform. so any comments, because it is an extraordinary, i think, victory. i mean, how long lasting it will be, we'll see, but i don't think one can comment on the last few weeks without noting this very impressive performance of a young center left politician, and i'm sure that jacques, i don't know what you think, but
m manuel would love to be in his place. >> this is the benefits of having a prime minister like mateo with a vision and that brings farther election on election day. in france, probably the political situation during the last years of the president was on the opposite track. has he evolved to reverse the movement through votes only? i don't think so. because the threats he's made in order to allow the president to remain the boss. what can happen is when and if was able to find some personal room and sketch a political director, that's not unfeasible. in that case, he becomes indispensable to the president. and he gets much more -- by
threatening to resign. because this would mean the end of this presidency. so we are in this position. we don't know, because it's only two months. and that's already one electoral defeat. so we will see. >> thank you. but you're, you know, watching all this politics, so how do you sense the renzi phenomenon, the almost 41% of the vote, which is huge. >> i suppose in some respects, if you look at italian politics, grio is slightly old hat and he lost a lot of people's support because he's been drierided in e press and it's not really constructive. so they're searching for someone to support and in came mateo renzi. he's obviously a very astute politician and did very well in florence, but he doesn't have a great deal of experience. and we'll have to see how he builds up all these policies that he's stating, whether he'll
be capable of doing it. and the other thing is, he's had an electorate, so you'll have see what and who they throw their support behind next. >> reza, less aurs, more reform? what has he done? >> he gave a 1,000-euro tax rebate to lower income families as a first step. >> i think the fact remains that italy has major challenges moving forward. the debt is extremely high, a quarter of the euro zone debt is in italy and the financing of that on a weekly basis is a major challenge. so maintaining market access would be extremely important. he has to run, because of his high debt, he has to run a sizable primary surplus. and one which they have been successful in recent years, but not as high as they had planned
to do. and the reform agenda, the potential growth in italy is extremely low. so the reform agenda to increase that potential growth has to encompass both labor market reforms, which are extremely difficult to deliver, given the constituency of the prime minister, and services reform, which in italy lags other countries, for instance, spain. so he needs the support and he needs the political backing to be able to deliver a very, very challenging agenda, so we are only at the beginning of the road in that -- >> peter? >> just a brief comment on that. less austerity, more reform. i think it depends on what you mean by austerity. in our case, we didn't have a choice, but to apply austerity to our public finances, because as i was saying, the debt had
gotten to a very, very high level. and if we hadn't taken visual action to reassure the markets, our dollar would have gone through the roof. we felt we had to do the same t did was tried to balance that policy of getting public financfinance s under control and bringing down public debt, encouraging foreign investment. since the british government came to power in 2010, we have created more than 2 million jobs in the private sector and shed 600,000 in the public sector. so we tried to move the growth towards the private sector. so i think when we talk about austerity, we need to look at the economy as a whole and see where there are areas where you need austerity and other areas where you can balance austerity and encouraging the private sector to take up the slack.
we haven't got enough credit from the banks yet. we would like to see more of a role in the financial sector in promoting growth, but i think it's going in the right direction. the second thing i would add is as we look at reform, yes, i said why the european union needs to do much more in terms of reform. that is now we're going to become more competitive and deal with some of the structural imbalances. more free trade between the europe european union and the united states of america. that's half of the world's gdp between us. that is where we can get additional growth, more jobs and more trade in both directions across the atlantic. and set standards will have to follow. >> on austerity, growth, during
the tough years for us in our program, we took about 18% out of our gdp through a combination of cutbacks and expenditures in addition to taxes and we haven't got time to take you through how well ireland is doing, but there's no question we're coming through in good shape. but the austerity fatigue is clearly there. and despite all the positive indicators, growth creation, all of that, people sent a clear message to the government that we need to soften the edges of this austerity. i think you saw that message more widely across europe. now, you asked about the italian prime minister.
and peter so rightly quoted all of these elegant statements from all of these leaders and they all go in the same direction. we've got to be more intelligent. more relevance, less red tape, et cetera, et cetera. the real problem is that it's so easy to say these things, it's so tough to do. because we have been saying this in europe for so long. in 2001, the constitutional convention was the same challenge that we're trying to address. we've got to connect better, be more relevant and reach the citizens. we wrote the script essentially back then and we're still trying to find ways that can do it. so there's no difficulty we can
always stand up and give the speeches about ideally the way europe needs to go forward, balancing this and that, and so on. but actually the challenge for us to do it this time is what is so huge. let me reecho peter's plug on that. there may be some short-term complications, as there are here in the united states because of the midterm elections. essentially, it's the response to that big question of how we try to channel globalization and the u.s. and europe have huge responsibilities there. because a win-win that's fair and balanced and seems -- that's what is needed.
i think an intelligent, fair, balanced tip is part of the answer rather than the problem. >> thank you very much, ann. i think we'll go now to a little bit of a question and answer mode. it will not be one question, but a few points, and then we'll try to make it as interactive as possible. i van, i'll start with you. could you please identify yourself so everybody knows. >> senior vice president at the german marshal fund. thank you for organizing this excellent panel. two questions. one is, one of the great successes of the european union has been the enlargement heralded over these past years, we're celebrating ten years of the big bang. the question is, what do these elections mean for the future of enlargement, because we have in washington the unfinished business in the balkans, not to
mention turkey. a core part of geographical europe that is not yet integrated. not unrelated to that is the second question, ukraine. has ukraine been a wakeup call like the elections have been? geopolitics for many of us, we knew it was never out. for some, they thought it was pushed to the side. will this lead to a more concerted european foreign security policy? thank you. >> thank you. >> getting to a more of a technical aspect on the economics of this, which is the
major initiative for europe, certainly in the euro zone this year, is the banking union. just a fairly straightforward, but complicated question i think, which is the motivation for banking union in part explicitly was to address the so-called loop of the relationship between sovereigns and the banks that held their debt and this potential risk. we don't hear much about that anymore. i believe that sovereigns -- sorry, banks within the euro zone own as much if not more as they did in the beginning of the crisis. to sovereigns are treated as risks with assets. and they have now said that is not the case. that sovereigns should be treated as risk related assets. so a question when you're addressing within the context of the banking union this relationship between sovereigns and banks, are sovereigns
riskless or not? >> we'll take two more. >> thank you. i wanted to come back to the leadership -- >> and former u.s. deputy trade representative. >> that's right. i wanted to come back to the leadership question that we started with, because it's critical for dealing with a host of challenges about u.s. and europe and a lot of the other partners are facing. going into the election, it was anticipated that the far right and the far left would make gains. so i don't think the result was wholly unexpected. at the same time, the concern that i saw was not that we didn't know who was going to emerge as the likely candidate for the presidency, but that there was no consensus how that person, he or she, would be chosen. so member states have said it's
our decision to make. members of parliament have said no, it's the will of the people expressed in the elections. so let's be constructive, what is the constructive way forward and how soon do you think this question can be resolved so that we don't have a situation of a lame duck commission? we don't have a president of the council or foreign minister, you know, to take terribly long? thank you. >> thank you very much. i just want to add for information that the -- according to the new agreement or treaty, yesterday i read a piece that said that the president of the commission, which was not the case before, actually had to also agree to the appointment of every commissioner. so in the past, it was the
council appointing the president and the commissioners. now the council appoints the president, has a lot of influence who gets nominated. but the president has the additional power of having to sign off. what that means in practice we'll see. the last question for this round. >> a short one on enlargement. what impact will a successful scottish referendum have on europe going forward? >> what do you mean by successful? >> successful -- well, the eyes of the -- [ inaudible ] >> by the way, when ann was talking about getting things done, it reminded me of the well-known phrase, we all know what to do, but we don't know how to get elected to do it. now he seems to kind have